South Africa’s businesses will face increasing pressure to transform as the African National Congress (ANC) is pressed by opposition parties and the nation’s poor to combat unemployment and inequality.

Two decades after the country’s inaugural democratic elections, political freedom was not enough to ensure lasting peace, stability and economic growth, and initiatives needed to be taken by the ruling party to regain the confidence of constituents as it went up against vocal opposition parties on May 7.

While the ANC was likely to retain a majority vote after the fifth democratic elections, it was critical that the ruling party’s proposed economic policies for the next five years addressed the challenges faced by South Africa’s majority, political analyst and Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Kaizer Nyatsumba said on Tuesday.

Speaking at a Seifsa breakfast briefing in Johannesburg, he said despite “impressive growth” since the dawn of democracy, the nation's economy had not done as well as it should have, with the economy faltering and underperforming.

The ruling party could no longer rely on its advantageous position as the country’s liberator and its performance over the past five years would be critically scrutinised and assessed at a time when the party was at its “weakest”.

The ANC could not afford to be “silent” on the plight of the poor, who viewed the “irrational call” for the nationalisation of banks and mines, as well as the redistribution of land without compensation, as an opportunity to bring themselves into the periphery of South Africa’s economy. The party could also not ignore the slow pace of economic change, Nyatsumba warned.

“The truth is, while the educated elite black has done very well in the no-longer-so-new South Africa, the vast majority of the poor have remained in the same conditions in which they found themselves before April 27, 1994, with some of them even being in worse conditions today,” he pointed out.

Given the ANC's failure to match the expectations of the marginalised, the ruling party had no choice but to adopt “radical economic positions” – if only to “parry the challenges” of parties such as the Julius Malema-led Economic Freedom Fighters.

“[This] is why the party will put even more pressure during the next five years on business to transform and even pass legislation that would compel business to embrace change,” Nyatsumba noted.

Seifsa economist Taffie Chibanguza pointed out that every ANC policy, as well as the party’s 2014 election manifesto, had embedded transformation elements.

“It is clear that the transformation agenda will be pushed quite aggressively on all fronts over the next five years,” he said.

Simultaneously, the ANC would need to establish South Africa as “business friendly” to retain and attract investments, particularly after Nigeria this week surpassed South Africa as Africa’s largest economy.

This posed a further challenge to South Africa, as nothing “played more” to the interest of investors than the position of the biggest economy, Chibanguza said.

“We need to show that we are business friendly … and recapture attention,” he explained, adding that with the planned infrastructure spend and business-friendly policies, benefits would arise for local business.

Nyatsumba added that, in addition to President Jacob Zuma and Finance Minister Pravin Gordhan’s statements earlier this year that only the business community could create lasting jobs, with the governments role being to create an environment conducive for business to thrive and attract much-needed foreign investment, it was encouraging to note the ambitious infrastructure and related projects of the National Development Plan (NDP).

The ANC manifesto leveraged the ambitions of the NDP, which was the cornerstone of the nation's economic policies, and zeroed in on infrastructure development, with a strong emphasis on boosting the manufacturing sector and driving economic growth through infrastructure spend.

Should the NDP projects be implemented “vigorously and successfully”, South Africa would be a very different and prosperous  country in the next two decades, with economic growth fuelled by the State and State-owned companies, Nyatsumba averred.

This presented opportunities for business to leverage – opportunities that only companies embracing the “transformation challenge” and deemed to be representative of the population in terms of ownership and employment.

“The business community would do well to anticipate enormous pressure from government to advance or accelerate transformation much more over the next five years,” Nyatsumba concluded.